Bilateral security agreement to impact US contractors

6 Nov 14

AFGHANISTAN

IMPACT – HIGH

What does the change mean? Under a new agreement, U.S. defense contractors and their employees in Afghanistan will be subject to Afghan law and must obtain visas and possibly work permits. They will also be required to register and obtain a business registration license in Afghanistan.

  • Implementation timeframe: The agreement isset to take effect Jan. 1, 2015, but is subject to approval by Afghanistan’s Parliament.
  • Visas/permits affected: Entry visas, residency visas, work permits.
  • Who is affected: S. defense contractors and foreign national employees currently working or intending to work in Afghanistan.
  • Impact on processing times: According to the agreement, visas for U.S. contractors and their employees are “to be issued or denied expeditiously.” The agreement also contains a provision for visas on arrival for U.S. contractors, but only in “special cases,” the criteria yet to be defined.
  • Business impact: The agreement will add immigration formalitiesfor S. companies supplying goods or services in Afghanistan under a contract with U.S. forces.
  • Next steps: A Joint Commission of Afghanistan and the U.S. is required to be established and, among other things, it will define procedures for issuing multiple-entry visas to U.S. contractors and their employees.

Background: The bilateral security agreement (BSA), signed Sept. 30, provides for U.S. troops to remain in Afghanistan beyond Dec. 31 when combat operations end. The agreement defines U.S. contractors as “persons or legal entities who are supplying goods and services in Afghanistan to or on behalf of United States forces under a contract or subcontract with or in support of the United States forces,” and includes several provisions impacting them and their employees. (U.S. forces are treated as a separate category of workers under the agreement and are exempt from Afghan law).

U.S. contractors currently in Afghanistan will be allowed to stay and continue their activities until their existing visas expire, even beyond the Jan. 1 implementation date of the agreement. Under current rules, visas can be renewed for the same term as the existing visa (three, six or 12 months). Under the agreement, U.S. contractors and their employees will be issued multiple-entry visas valid for a minimum of one year. The agreement also provides that in “special cases,” Afghanistan must make available and put in place a process for U.S. contractors to be issued visas on arrival in Afghanistan. The definition of these “special cases” and the question of if and when such a process will be available, depend on the decision of the Joint Commission.

Under Article 11(2), U.S. contractors must register in Afghanistan. They will be issued a business registration license valid for three years and must pay a one-time service charge by the Afghan Investment Support Agency.The agreement says the fee must be “reasonable” and the process must be “expedited,” but the fee and processing times have not been set. Visas will be issued through the registered entity.

While the agreement does not require U.S. contractors to obtain work permits, other Afghan laws may require them. The Statute on Employment in Afghanistan specifically requires foreign employees to obtain work permits, and it is generally understood from the Law on Traveling & Stay of Foreign Nationals, passed in 2000, that foreign nationals are required to obtain work permits before they can receive multiple-entry visas. The Regulation on the Employment of Foreign Nationals requires that these work permits are obtained from the Ministry of Labor & Social Affairs.

BAL Analysis: The agreement explicitly places U.S. contractors and their employees under Afghan law and they should anticipate new business registration and visa procedures in the coming year. Once the joint Afghan-U.S. commission meets to set visa procedures, details will be clearer. The commission is also required to issue instructions to relevant authorities, including whether U.S. contractors will be required to obtain work permits.

This alert has been provided by the BAL Global Practice group and our network provider located in Afghanistan. For additional information, please contact your BAL attorney.

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